Under ORS 179.360(1)(f), only the superintendent of the Department of Corrections may appoint a chief medical officer. OAR 291-124-0016(2) is invalid. An agency policy is a rule and not an internal management directive if it has a direct effect on people who are not agency employees.

Smith challenged the validity of Department of Corrections (DOC) OAR 291-124-0016(2), by which the clinical director of DOC’s Health Services appointed a “chief medical officer” for each DOC institution. Smith also challenged the validity of a DOC health policy, #P-A-02.1, which described health care services provided to inmates under OAR 291-124-0016(2). Smith argued that the rule is invalid because it is outside DOC’s authority; namely, he argued that OAR 291-124-0016 materially alters prisoner health care by allowing Health Services to appoint and oversee a DOC institution’s chief medical officer. He also argued that DOC policy #P-A-02.1 constitutes a “rule,” and that DOC failed to follow rulemaking procedure in creating the policy. DOC argued that ORS 423.075 gives the DOC director the ability to delegate “authority” it determines “necessary,” and that DOC policy #P-A-02.1 was not a rule because it was an “internal management directive.” The Court held that while this is true, ORS 179.360(1)(f) requires the superintendent to appoint the chief medical officer, which bars the director from this ability. The Court also held that DOC policy #P-A-02.1 was not an “internal management directive” under the standard in Rogue Flyfishers because the policy had a direct effect on people who are not DOC employees. OAR 291-124-0016(2) and DOC policy #P-A-02.1 held invalid.